I was going to lambaste the plan for its touching faith in the Competition Fairy, believed to shower her low cost/high quality beneficence on private insurance plans competing in a government-run and -financed marketplace. Then it occurred to me that the ode I was reading was virtually identical to the praises sung by Democrats for the prospective healthcare exchanges to be established by the Affordable Care Act. Indeed, the ode may have been composed in large part by a Democrat -- Ron Wyden, who coauthored a proposal with Ryan in December 2011 that Ryan's more recent plan resembles more than it departs from (notwithstanding important differences). Here's part of the opening movement of Ryan's Song -- emphasis (and repetition) in the original:
For younger workers, when they reach eligibility, Medicare will provide a Medicare payment and a list of guaranteed coverage options – including a traditional fee-‐for-‐service option – from which recipients can choose a plan that best suits their needs. These future Medicare beneficiaries will be able to choose a plan the same way members of Congress do. Medicare will provide additional assistance for lower-‐income beneficiaries and those with greater health care needs.
To strengthen the Medicare program to serve the needs of both current and future retirees, the budget would reform the Medicare program and put it on sound financial footing for generations to come. For those workers currently under the age of 55, beginning in 2023, those seniors would be given a choice of private plans competing alongside the traditional fee-‐for-‐service option on a newly created Medicare Exchange. Medicare would provide a premium-‐support payment either to pay for or offset the premium of the plan chosen by the senior.
The Medicare Exchange would provide seniors with a competitive marketplace where they could choose a plan the same way members of Congress do. All plans, including the traditional fee-‐for-‐service option, would participate in an annual competitive bidding process to determine the dollar amount of the federal contribution seniors would use to purchase the coverage that best serves their medical needs. Healthcare plans would compete for the right to serve Medicare beneficiaries.
As has been often noted, this structure is essentially that of the ACA -- with a public option. How could both sides have arrived at such a structure to solve different problems? And how can both sides laud the same structure in one incarnation and demonize it in another? The answer lies in the differing circumstances under which universal health coverage and Medicare reform were undertaken.
For Democrats -- at least for an earlier incarnation of Obama -- private insurance exchanges constituted a decidedly second-best way to get to universal coverage. For Republicans, a Medicare exchange with a public option is second-best to entirely dismantling a single-payer senior health insurance system that is rootedly popular but at variance with their ideological preferences. Thus Democrats sing off-key paeans of praise to healthcare marketplace competition. Republicans, in their turn, have been driven to tout (in this less extreme iteration of Ryan's blueprint) at least a reasonable facsimile of the Medicare Guarantee (though allowing premium increases to cover inflation in excess of a yearly cap for "means-tested', i.e., relatively wealthy, participants):
This budget also seeks to strengthen protections for lower-‐income Americans. If costs rose faster than this established limit, those low-‐income individuals who qualify for both Medicare and Medicaid (also known as “dual-‐ eligibles”) would continue to have Medicaid pay for their out-‐of-‐pocket expenses [forget for the moment that Ryan's budget guts Medicaid]. Other lower-‐income seniors (those who do not qualify for Medicaid but are still under a certain income threshold) would receive fully-‐funded accounts to help offset any out-‐of-‐pocket costs.
Guarantee Affordable Choices for All Seniors
Seniors would be guaranteed a plan that is at least the value of the traditional fee-‐for-‐service Medicare option. Health plans that participate alongside a traditional Medicare option in the Medicare Exchange would be required to offer insurance to all seniors – regardless of age and health status – thereby preventing insurers from cherry-‐ picking only the healthiest seniors for coverage under their plans. These protections ensure that Medicare’s sickest and highest-‐cost beneficiaries have access to affordable and quality coverage choices.
The proposal requires all plans on the Exchange to include guaranteed issue (i.e., they cannot deny coverage based on pre-‐existing conditions) and community rating (i.e., they cannot impose prohibitively disparate costs on seniors) to ensure that seniors are able to choose an affordable health plan that works best for them – without fear of denial or discrimination.
Stronger Protections for Those with Greater Needs
The federal contribution to seniors’ health plans would be risk-‐adjusted so that the sickest seniors are protected from high premiums as well as adverse selection from insurers. Building on the risk-‐adjustment tools currently used by the Centers for Medicare and Medicaid Services (CMS), proper risk adjustment would ensure that seniors with the highest health costs would still be able to find an affordable plan. Federal contributions would be increased to account for a senior’s health status and age.All these controls for equity and quality -- subsidies and stronger price guarantees for low-income citizens, community rating and guaranteed issue, risk-adjusted premiums -- resemble 'government controls' of the marketplace in the ACA. The "public option" that serves as a benchmark to which other plans must offer an "actuarial equivalent" is the lost holy grail of the ACA.
Ryan does go to town demonizing the "Bureaucrat Control" he sees as embodied in the ACA's Independent Payment Advisory Board, empowered to present Congress with payment rules and rates to keep costs under a yearly spending cap. But he gestures at least faintly in favor of another bete noir of regulation-averse Republicans: universal coverage rules to which all participating plans must adhere. My emphasis this time:
Strips unaccountable Washington bureaucrats of their rationing power; puts patients in control of their healthcare decisions instead of government, and forces providers to compete for the right to serve seniors.All Medicare health plans are required to meet high standards of care.There's a lot of running room in "high standards." But the principle is at odds with that behind a GOP shibboleth for "health reform" in the non-senior market: allowing insurance sales across state lines, i.e. enabling the worst state standards in the country to become a de facto national standard.
Step back for a moment from the partisan passions of the day, and we are left with three generations of prospective healthcare reform -- one fledgling, one in the midst of a protracted, touch-and-go birth, one barely past the moment of conception and quite likely to be stillborn. That is, Romneycare, Obamacare, Ryancare.
Too bad that Father Romney and Son Ryan were induced by political expediency to curse Obamacare, true heir to Romneycare (i.e. "the same fucking bill" according to the true father of both, Jonathan Gruber), as a bastard monstrosity. Meanwhile, they parade the grandchild, Ryancare, as newborn king to save an aging population -- while Democrats see it as the Frankenstein monster that will destroy Medicare as we know it.
It is at least possible to imagine, on structural grounds if not on the merits, a compromise intimated earlier this week by Aaron Carroll:
A bipartisan plan could come from Republicans accepting the Affordable Care Act as it stands for all those younger than 65, without further talk of repeal, in exchange for implementing the Ryan-Wyden plan for those 65 and older. After all, that proposal isn't really much different than the way the exchanges will work in the Affordable Care Act, with the exception that there is a public option (which should be opened to everyone under 65 as well). Everyone gets something they want, with all the tools available being brought to bear on containing future costs.A logical extension would be one unified system with a public option at the center of an insurance exchange. That feels like anathema, for various reasons, to partisans on both sides. If that's where we end up, the irony will be that Romneycare will have been forerunner -- notwithstanding Father Romney's efforts to devour his offspring. And Ron Wyden, whom I pegged as Ryan's dupe just yesterday -- would shine forth as a true visionary.
Can the competition fairy control healthcare costs?
How Ryan duped Wyden
How Wyden muddled the Democrats' attack on Ryancare